This Young Entrepreneur is Bleeding Money – Can We Fix It?

Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world. But today I'm traveling out to co Crew pools out in California to help them turn around their business.

I don't know. I'm always. I'm always worried.

The biggest problem right now is that the owner is paying for every single pool and buying these pool routes from other competitors. Right now, we're at the mercy of buying clients, so we've really got to nail down what's our customer acquisition strategy so he doesn't have to keep paying hundreds and. And, yes, even thousands of dollars per customer. These buying from these pool routes. Let's go ahead and roll the coaching tape. If you look at this, there's some days where you're crossing the same street four days a week.

Stupid.

Like right there, that one street, you're crossing 1, 2, 3, 4 different times in the week. It's the same street.

Okay, so then how do you go about once you max out a route and, like, there's, like, an awful one, you know, and you have no room to put it where it makes sense, you know?

Well, how do you pay your crew right now? Is it a percentage of revenue?

Pretty much, yeah. It's like 30%. But I just pay them, like, per stop, so it's easy. And the app does that for you? Yeah, yeah, it calculates it.

Yeah. Because most of the time, if they have a job that's like, right next to another one, they'd rather work the extra 15, 20 minutes, because that money, that's like money in the bank.

Yeah.

And they'll go above capacity if needed just to get that job since it's so route dense. But then you come to the point eventually they do overflow.

And do you guys move around customers just all the time?

Like, so we do plus or negative one day. So when we set them up, we'll say, okay, you're gonna be placed on the schedule Tuesday plus or negative one day.

Wow.

Based upon the schedule, based upon the weather, based upon whatever.

That's crazy.

Then it gives us flexibility. Like, if I say Tuesday plus or negative one day.

Yeah.

It gives me Monday through Wednesday.

That isn't. That doesn't make a ton of trouble with the customers? My customers, like, hound me for a time.

Really?

Yeah. Time of day, and that's, like, so hard.

So why. Why are they. Ask locked gates.

Is it they want gates. Dogs? Yeah. Like, they don't want people. I don't know, too late or too early or. Or they want to see them there, maybe, you know, I don't know, because it's pretty fast. Like, a stop's 15 minutes, you know, Matt.

Right.

Usually. So a lot of customers kind of think, maybe not a lot, but some customers think, you know, what are we paying for? You know, you're only paying for 15.

Minutes, and you're doing that once a month, usually. Or is it once a week?

Once a week, yeah, Once a week.

Yeah. Because, like, I think, like, one thing that I thought about if I ever do pool service was to do a video at the end of each visit. Because you guys aren't going to get dirty. You're like. We're like. I've thought about this for lawn care, too, but the challenging part is, like, guys are pouring sweat, there's dirt everywhere. And, like, that's the trouble.

Yeah, it's probably as dirty as I can.

Let's go. Hey, you're around.

I felt dirty. I felt dirty.

So, like, you know, even if you made a video for them each time.

That you came and selfie style, like.

Yeah, like, hey, it's Joe over here at your property. Got this done today. I added a little more chlorine, did a little bit more of the boring. Da, da, da, da. Like, that sort of a video proves that you were there and then puts less emphasis on them having to be on site when you're there.

Right. It's not a bad idea because you.

Do not want them dictating time.

Yeah, time's rough. And I do have some customers like that, but I don't know. A lot of customers text, too. Do you guys text a lot of customers? Yeah, we do. Yeah. That's, I guess, just the way it is.

Yeah, like. Like, the big thing is ultimately right now, we're at the mercy of buying clients. That's what stinks.

Pretty close. I mean, just to speed it up. Yeah, it helps speed it up for sure.

But we have 150 clients. Yeah, that's just out of those 150. We bought 50 of them.

Mmm. Probably close. Yeah, probably close to 50. Yeah.

Okay. But on those 50, we've spent how much?

Probably probably a little bit over 30 grand. Yeah.

Okay, so my question is if we paid $30,000 in marketing so bad.

That's what I always think, but then I start to do it, and it just doesn't seem to return like that.

Okay, do we have the website up and stuff?

Yeah, yeah, website's up.

Okay.

Maybe I can show you that.

Cool. And, like, right now, in terms of Ads. Do you have Google running or anything like that?

I think I got Google Ads. But here's something that maybe I want to ask you off camera, but.

Is the contractor's license.

Yep.

Do you guys run into that problem for the services? That and anything over $500.

Yeah.

So, like, on your big projects.

Yep.

When you're getting started, did you.

Yeah. So we have franchisees in California. So California, Basically, anything over $500, you gotta have a contractor's license. So you've just skated around that basically by doing the smaller stuff only, I'm assuming. So you do occasionally the larger ones kind of thing, which, like, literally everybody in California does.

Okay. Like, honestly, I'm working on it right now. I paid for the school. I'm going through it. What was I gonna show you?

Google or, like, in your website?

Okay, I'll show you the website.

That makes me feel better. I didn't know if you would go like, hey, bro, you should definitely not do that. Or.

No, I think it's really good. Because the good thing about having with Google, local services, the more barriers they have to get in, the less competition. So, like, most people in pool service down here are not going to get their contractor's license.

Right.

And so, you know, from. From your perspective, what's the extra cost? Just, like getting the license.

Yeah. Bond and stuff. Like a couple grand a year, right? Yeah. But for.

Oh, that's cool. Let's go.

I mean, I don't know. I. I've been watching your videos and stuff where you talk about getting pictures of your guys. I definitely need to do that.

Yeah.

Like, maybe a picture of the truck.

Right.

Here's the thing, though. I was thinking about rebranding because I don't really like that it's my last name. Yeah.

It's hard to say, too.

Yeah.

Honestly, it's super.

Tongue twister.

It's. Yeah.

So that's what I don't like. I have a little bit of a lisp too.

Yeah.

When I say, like, co crew. Like, yeah, Co crew. Pools. People. People don't.

Dude, it took our guy in the media team.

Are you serious?

Like, five tries to say the name.

Yeah.

Like, co. Co crew. That's how it was going.

So, like, when do you know, though? Like, there's no way. You just picked a gusa and you're like, all right, this is it. This is the best name. No second thoughts.

Well, it's not about the name in terms of the branding. Like, the word Nike is basically a Greek God. Like, it doesn't Have a whole lot of reference, like no one cares. But KO Crew is just hard to say. And so if it's. If it's hard to say, people will not remember it. Yeah, they're right. Was it co. Yeah. Was it Crew?

They're like Joe Pools.

Yeah, exactly like Joe Pools would crush. It's easier to remember.

Yeah.

Right. And everyone just thinks that their pool guy's name is Joe.

Yeah. I mean, I don't know. I don't think they. Yeah, yeah. Probably something. I'll. Probably.

Anything else. Anything else. Like, you could just make up anything just to make it where it's easier.

To say, oh, man. Oh, yeah.

But yeah, in terms of, like the site, like, you know, some of these pictures could be you guys uniformed up in front of a truck. The one that's decal would be ideal. Right. Just to kind of separate yourself from the other 50, gazillion guys I know running around here doing pool cleaning.

There's 50 million.

Oh, I know. I'm very aware. Same thing with lawn care down here.

Really?

Oh, yeah. There's a ton of people running around without their contractor's license, doing it under the table, cheap, etc. So how many leads does this usually generate?

Maybe once. One or two a month.

Really?

Maybe. Yeah. Okay. And I pay for. No, I just pay for os, actually. But yeah, I'll probably rebrand, so no more money into the wraps if I'm gonna rebrand.

Right, Obviously if you're going to rebrand. Yeah. I wouldn't do that.

Well, I was thinking about paying. Have you heard of Dan? Dan, he works with. Have you heard of Tommy Miller? Yeah, yeah, Dan.

Did you start remarketing?

Yeah, I was thinking about paying for that, but it's like 30 grand or something.

Yeah, No, I wouldn't do that.

No.

If you spent 30 grand, if you spent $500 on a logo and some rebranding for someone off of upwork, and then you put that 30 grand towards marketing. Like, I know the customer acquisition cost in this industry. You do not need to pay $1,000 or $2,000 per customer.

What have you been hearing for acquisition costs?

You can get under $300.

Okay. Yeah, yeah, Good, good.

It's simply a matter of dialing your Google Ads.

Yeah.

Like, you're just people that are looking for pool service.

We were doing some door hangers too. I probably. We've probably done like a thousand recently. And. Yeah, not too much. Yeah, not too much coming back, which is weird. I put like a free first. First month free, too, which how many.

You get any calls at all?

Not yet, no.

Right.

I don't think so. I actually, I think I got one so far. I got to be better about asking, but usually they mentioned the free month.

Yeah. Because the thing is that even on a thousand door hangers, if you get one response.

Yeah.

Your. Your customer acquisition cost is still gonna be less than $2,000 what you're paying to buy them.

Yeah. I think it was more. I was like chasing like just faster, fast, fast, fast. And I was like, this is just so simple, so easy. Throw money at it.

Right.

I had the money. I was like, well, I could, I could. I have money to put money in marketing and buy pools. So I'll just do that, you know.

Right. But like growth at all costs.

Yeah, but.

Okay.

I don't know.

And so, so right now, really, all the, the current customers, the new ones are basically coming from the. You're buying them. Like there's not a lot of growth quickly, you're saying on the.

I mean, right now it's a little busier. Like I probably get two weeks, like from either Angie or Yelp or just like referrals or something, you know. Usually like two a week.

Yeah.

Recently. Which isn't bad, but I'd like it to be faster.

Right, yeah. Because even like here on your website.

Yeah.

It's like right here, there's really no place for them to get a quote. Like, it says get a quote, but it takes you into the contact us page.

Right.

And then like the just says inquire, like if. Right from the get go.

Yeah.

There you go. If you had the S request form right here, immediately they know what to do. Fill out the form, get a quote.

So get you instead of contact to us, probably get a quote.

Because like that button requires them to go different page. You're going to have a drop off.

Right, right, right.

Like, I basically want that. What that is the inquire thing. I want that right on the homepage. Like, right, right there. This gets moved over to the left side. SM request form on the right. Because people are gonna come to this site wanting a quote.

And I think we got like, I don't know, I could check the traffic, but I think it was like over like 200 people visited. And like, no. No leads.

No leads. Yeah.

Like, seems. I don't know, maybe that's normal.

Well, the bottom line is like people are coming to a full service site to get a quote.

Right.

We want to get as easy as possible. And that is get a quote above the fold. On the homepage. Not where you have to click a Contact Device Contacts page or a Get a quote page and switch to a different URL immediately. You're going to have some sort of drop off.

First page.

First page.

That's easy.

I like the fact this is your premium pool service in Oceanside, California. It says pool care and repair. That's great. But like, having that right on the homepage will immediately drive more conversions than just contact us or get a quote. And the Get a quote is not Get a quote. This is contact us page. I'm going to go out on a limb and guess these go the same place they do Pain. Pain. So. Okay, that does work. Very good.

Done. I'll do that. That's a good change.

What is that? Whoa, whoa. I switched.

There's nothing on there. What do you want?

No, you're good. I just accidentally switched out of Chrome.

You're good. It might not load, but.

Here'S the 30 that I bought recently.

Okay.

You can see the rates are super low. Even those are per month landscaping. Yeah.

And you paid about how much for this?

I. This one I paid like 6, 6x. So like 6 months.

6 months revenue.

Yeah. But then in the contract though, there was. There. There is a set amount to raise to. So, like all these, she said I could raise them like pretty much like 30 bucks a month and if anyone left, she would replace them. So I'm fighting her over that right now, but she doesn't want to replace them.

Six months of revenue. That means we got to do these, these probably for 18 months to break even.

I guess, 30, 40% profit margin business.

Yeah.

We have to basically do it for a year and a half, but to break even. Which means if they leave in a year and a half.

Ouch.

We lose money on them.

Yeah.

And which means that let's just say a third of them do just because of natural attrition.

Yeah.

Then all that extra burden cost will go to the remaining ones. I mean, it could be two and a half years before you actually make money on these.

So deceiving. So deceiving. Because it seems like you're making money, you know, cash flow.

Yeah. But even 30, 40% profit is really good.

Yeah. Which I think I'm at. We'll see.

Yeah. Which is kind of like the. On your P and L looks like that.

It does.

Okay, so right now on the piano, there's not really like a labor burden. Are you doing 1099 to the guys that are currently just taking their own vehicles and doing the pools then, no.

I'm W2, but I can show you. But one guy, there's this whole thing, so he pretty much can only show half his income. So I pay him under the table half, and then I pay him W2 the other half. And the other guy's full time. W2, really? So. Okay.

I didn't see it on the P and L. Really? I might have just missed it. Maybe it was just payroll tax was coming through there.

Yeah. I don't know. I mean, hopefully it's on there. That would be bad.

No, you're good.

But it was just recently. I mean, I. I hired my first guy, like, sick, probably less than six months ago.

Okay, cool. So last year is basically yourself.

Yeah, she.

Like, $150,000 last year, basically by yourself.

Yeah, Yeah, I think. I mean, if that's what it says. Yeah.

And so your. Your big challenge now is, like, switching from the labor, doing the work to now, like, managing the cruise.

Right.

Got it.

Yeah. And especially since I'm young, like, my. My. Yeah. Both my guys are like 40. They're super cool, but I don't know. And it doesn't seem to be a problem, but there's still a little thought in the back of my head, like, you know, these guys could be my dad.

Yeah, yeah. No, I get it. I remember I was 18, hiring, like 30 and 40 year old.

Really?

Yeah. How old are you?

21. I just turned 21.

Cool.

Yeah, very cool.

And so how do you find those guys and then how do you manage them on, like a daily basis?

Yeah, So I found him on. Indeed. And then.

And then I. Yeah. Just went through interviews and ride along, trained him for two weeks. I don't know if that's enough or not, but.

And then, yeah, we just sent him out. The app makes it easy because, I mean, the video is a good idea, but at least right now we send pictures and, like, got it readings. So you can see, like, Terry's done one today, so you can see, like, all the previous, like, chemistry readings, what he added. There's like a little checklist and. And then it sends him a picture. Very cool.

That's pretty cool.

So it's kind of easy to track a little bit. Yeah, I can kind of watch over them, make sure the pool is at least not green, you know?

But you're saying, like, you don't mean to generalize the area in the morning and then, like, when do you meet at all?

No, no, I mean, when was the.

Last time you saw them?

I saw what my other guy, like, Last week on accident, just at the supplier.

Really?

Yeah. Like, we were doing training with the other guy.

And so what prevents them from doing other jobs?

Like, that's a good question. Trust, I guess. Okay, trust. And what do you. What do you mean by that?

Like, the neighbors, like, hey, dude, can you come over here and do mine?

That's always my fear. But.

I don't know. I don't know how I would stop them. So I guess I thought about I could just reward them for giving them to me. So I told him I give him 50 bucks for a referral. I mean, it's not much, but maybe some incentive not to take them, you know, and then. Yeah, I don't know. I think they're pretty trustworthy. Yeah, I do trust them.

And how much can they make, like, in a day usually? So they get 30% of revenue.

Yeah. So, I mean, typically they make like 12 bucks a stop. So, I mean, around like 250, probably.

All right, cool.

On average.

And they're happy. Like, they're just happy with that.

One guy's not. And then one guy is. He's like, I don't even care what I get paid. He's just like, I just want to stay busy, you know?

So one guy's totally cool. And then one guy's like, I want to work, like as many hours as you can. Like, this is not enough. You're not giving me enough. You know, which is fair because he doesn't even have 40 hours yet. But I've tried to, like, supplement him because I'm trying to build up his route.

By just like, I told him I pay him hourly to pass out flyers, like, to make up the hours or told him if he. If he cold called or door knocked, I'd give him like 200 bucks commission on it. Which I think are decent. But.

So, like, right now, operationally, what do you feel is the bottleneck for growth?

Probably honestly leads and just kind of like a plan, I think. You know, because I think so far, so good. I had to fire one guy previously. Didn't work out. And then so far, these guys seem good.

Is it mostly like just low quality work that is the reason for firing them?

No, that guy was, like, drinking and. And then, yeah, low quality work. Like, I kept getting calls. I was getting. I had magnets on his truck and I was getting calls from random people. Like, I was driving my wrapped truck fully wrapped for two years and never got a call. Like, I don't drive perfect and I've never got a call. He Was driving for a week and got a call. He was like, your guy's falling asleep. Some random guy. You're falling asleep at the stoplight. Like, one of your guys, you know, is out, and he's like, I don't even remember what happened. Like, yeah, and I gave him another chance after that day, too, and then he just screwed up again, so.

So the one guy takes your truck home, though, and, like, uses that from his house, just, like, driving from there.

Right. And I have a tracker on it, but I don't know. I think I. I don't. I trust him. I mean, he asked me if he wants to use it for, like, personal.

Right.

Sometimes. And I pretty much tell him yes.

Yes.

Because I don't know.

Okay. And so really, like, the bottleneck is getting more leads.

Leads, and. Yeah, just a good plan and kind of like. Yeah, like, what I should be doing. Like, you know, because I feel like I'm kind of all over the place a little bit, like, with what I'm doing, and I feel like I just kind of, like, pick what I want. Like, do I want to go get some repairs or do I want to go get more pools, or do I just want to, like, be lazy? You know that, like, these past couple weeks since I hired the last guy, I've just been in, like, a slump. Like, not really feeling, like, working. Like, I have money. I have. Like, I don't really have to work. And it's like, I know it's not gonna last, but I just do nothing, you know?

Well, what do you want the business to do? Do you want to make $300,000 a year and you make 100 grand passively? Do you want to get to a million?

Exactly.

So why.

Yeah, no, I really want to get to a million because that'll be the point where. I mean, at least what I've heard is where you can hire a manager.

And, I mean, hopefully I can hire my mom. Real estate's not doing good, so she's always wanted a job, so that'd be cool. And then also, like, I think anything under for 1 million to. If I ever wanted to sell it would be, like, a decent payday. Like, maybe even close to retirement worthy. Maybe.

Yeah.

So there's that benefit of growing it. And then also, yeah, just not staying in the field. I mean, working all the time. Like, I don't. I don't want to have to. Like, I'm very active, too, and I'm always getting hurt and stuff, and it's just not ideal to have that be Your only option. I know, I've watched your videos too and you said like, you know, that's when you switched, when you got injured by that like chipper or something. Right. You got cut up. You're like, alright, I gotta start not doing this myself, you know.

So your goal, like build 10 million, hire your mom or some sort of manager.

Probably not my mom to manage it, but it would be nice to have jobs, you know, maybe, you know, whatever admin or something, you know.

Okay. And then you would then do what?

I kind of like working in the field. Honestly, like, computer work is not really my favorite thing.

Yeah.

So that's what's kind of also weird. But I don't like cleaning pools that much.

I like the process if you're in the field.

I like the projects.

Oh, the projects. Like cleaning out like old messed up ones or installing or.

Yeah, yeah, yeah. Pretty much, yeah. All that. Yeah. New equipment. Yeah. New pools. And that's my end goal too, is to get up to the service to a point where it can kind of fund building pools. Because that would be the end goal.

That's a whole new level.

I know that would be cool because I know everyone chases the high ticket and I know why, but. So I think I'm gonna chase it too.

Okay.

I think I feel like building pools is like kind of, I don't know, like under the radar a little bit. Yeah. Everyone's chasing H vac and stuff, but pools are like minimum, usually like hundred grand.

They're very hard.

Are they?

Oh yeah. If you do them right.

Ability.

You guys probably built some, right?

Well, I've never built any, but I know several contractors that have. Like, it's just a matter of like you are putting tens of thousands and hundreds of thousands of pounds of water on inside of a hole that you dug. And then you have to reinforce and make it, build it correctly. Like it's tough, but that's where you want to. Where you want to go.

I think so. Yeah. I think that would be cool. Yeah. I like single projects where it's like you got to like figure out stuff and kind of think about it. Instead of. Pool cleaning is nice, but it's just kind of mundane, you know, it's the same thing every day, which is chill for some people. You're making, you're making good money, but it's like it's. It gets to the point where it's not really challenging, you know.

I like easy money. I'll take easy money. So what's, what's the goal that's what I'm trying to get to. Like, is the goal to build big a business that has a bunch of big projects or is it to make a really money focused. We're gonna make a bunch of cash.

Both.

Okay.

Bunch of cash first fantasy goal down the line just on a whim, maybe want to build pools later on.

Got it.

But okay, definitely like this right now.

And so what. What is preventing us from right now from going where we're at now to the million dollar business? That's cash flowing very well. Like right now. From a, From a, A just like brass tax perspective, how much cash is in the bank now for the business?

60 grand.

Okay. There's plenty of cash.

Is that plenty though?

That's another thing for a $300,000 business.

Yeah.

You have two months worth of revenue in the bank.

But what about the debt? That's what I.

How much debt?

Probably close to 60 grand.

Okay, so that was used to basically buy the lease.

The trucks. The trucks.

The trucks. But those. That's on like fixed financing, right?

Yeah. Does that count or no?

Well, it's not personal debt. It's not accruing massive amounts of interest. It's on fixed monthly payments. Is that the two trucks basically that you got?

One's a lease and one. I bought one. Got it.

So the Tacoma is a lease.

Yeah.

You bought the other one and then that's the one you wrapped.

Yeah, got it.

But there's no other like, you know, credit card debt, you know of any other personal loans, anything like that?

I probably have a credit card bill, but it's, It's. I just pay it off every month, so.

Yeah.

Yeah.

So like, you're still. From a cash perspective, you're fine, I think.

But I don't know, I'm always. I'm always worried that.

I don't know.

What'S going to happen.

I don't know.

I know what's the worst case scenario?

Maybe.

I don't. Yeah, I don't know. Honestly, I have insurance too, so. Yeah, I mean, yeah, I guess probably car crash, but we have insurance. So that's another thing I need to talk about is commercial insurance. Yeah, it was like crazy, but yeah. But yeah, I don't. Yeah, you're right. I don't. I don't know what could cost that much. Right. So I just. I feel comfortable with a lot of money and. Okay, here's another thing. I feel like, like since I started with like 20 grand, I feel way better about myself being at like 60 grand knowing that I'm like, at least going up, you know, Like, I feel like I'm getting something and going somewhere, you know, from this, but if I just throw it all back in, I'm like, you know, it's a lot of risk. And it's like.

Yeah, it's like. I don't know, say it fails and it's like, then I really have nothing. You know, I did all that for, I guess, experience and stuff, but.

Okay. Why are you so afraid of everything?

I don't know. I just. I just don't like not having money, honestly.

Okay. Why?

Probably, like, for me, it was my.

Mom'S terrible at money.

Okay. That was my parents, too. My parents. Terrible at money.

Yeah.

I get where you're coming from. I understand the risk aversion. Because you never want to go back to a place of pain around money.

Yeah.

But also, like, if. If you're. You gotta ask yourself, like, what's more painful? Being at where I'm currently at. Right. And not achieving my goals or risking going for my goals and failing.

Yeah.

You're 21. Let's play this out. Let's. Over the same next two or three years, you go for it and you fail.

Yeah.

Like, you're gonna be 23, 24.

I'm bummed. I'm like, ah, why didn't I go to college? Like.

Yeah, but see that play out all the options.

Yeah.

Right. So, like, right now, if you would have gone to college, you wouldn't have a $300,000 business.

Yeah, but I would have a free. Cause my dad did say possibly. He would possibly pay for my college. So to be like, an engineer. He wants me to be an engineer. So that would be kind of the backup plan. But.

So that's what I'm saying. Like, let's say that right now you are getting paid to go. He was paying for you to go to college.

Yeah.

Right. You would have a business that has $0 in revenue, you'd have little to no business skills and be studying engineering, which doesn't sound like a huge passion of yours.

No, definitely not.

So we would have wasted four years, then gone and started the pool company?

Possibly, yeah.

Likely, yeah.

It's possible.

You don't seem super energized about engineering.

No, no, no.

So.

So it's like a good title. You know, you're like, oh, I'm an engineer.

Is your dad an engineer?

Not really, but kind of like, he's just. He's worked there for so long that I think he manages the engineers, probably.

What do you want to do.

Yeah, no, I'm cool with the pools. I just like making money. I don't. I don't really love pools, but, yeah, I like helping people. Working with people is fun. And helping people, even if it's fixing their pool, you know, it's still fun. Yeah, yeah. To help people. And then. And yeah, if I can make money at it. This seems like a good. I was chasing just whatever I can make money at, probably. And this seemed kind of like a safe bet. Right.

And so I just, like, the concern I have is, like, right now, even, like, once you've got a second employee, the fact that you immediately default to, like, feeling lazy.

Yeah.

Like, it almost feels like as if you, like, you haven't committed to it.

Almost. Yeah. Or it's almost like.

And you're talking about, like, a secondary plan of going back into engineering school. Like, what in the world, dude, you have a $300,000 business.

I think the pain right now is so little. You know, like, before I was in a lot of pain, and then I just. I wanted to work out of it. And then now it's like, it's decent enough. Yeah. Right. But I still do my mom's house, like, Right. Which is not ideal. And then.

Well, even going legit with the business.

Yeah.

Would create more pain in the form of expenses, but it's also the thing that's probably going to be required to go to the next level.

What do you mean?

Like a shop getting the contractor's license.

Oh, yeah, yeah.

Actually paying everyone above board. Going and getting the website done. Actually, you generating the leads, like, right now. Who makes money in the pool service industry is the lead generators. I've looked at this industry up and down.

Really.

The people who make money are the people who get the routes and then sell them off.

No way.

100%. You paid $2,000 for someone. It takes 18 months. Why would I not? If I can just get the lead, service it for a month or two, and then sell it to someone and get all the revenue and profit for the next 18 months. Today you're like, oh, well, it's only 10, six months of revenue. That's 18 months of profit.

Right.

So if I can just get the lead and sell it off to you.

Yeah.

I'll make 18 months of revenue or 18 months of profit today.

Yeah, that's rough. And I paid more, too. Like 12 times for a couple of them.

Brutal. That means you have to keep them for two or three years.

And, you know, it's so common, too, in the pool Industry.

That's what I'm saying. I've looked at this industry. I've looked at just making a lead gen surface this because there are so many people that are willing to buy these, these routes and it's like, so it's been so commoditized. It's like a rare home service where it's like, oh, just buy a route and it's like a valuation, like a marketplace for just buying routes. We don't have that in lawn care. No, like buy routes of lawn care. You don't know that? No.

Seems like the same thing.

I know, but in pool service has become commoditized to the point where that happens. And the problem is all the money just goes to the lead gen. Like whoever can get the leads is the winning. They are the ones making the money in this industry.

I thought about doing that and I know guys that do that.

But this is the thing. If you can get the customer keep them for five years, you'll make twice as much money. But so I would say you become the lead gen with the service arm. Right?

That would be ideal. Yeah. I just got to know what to throw money at, I guess.

No, you got to figure out how to be able to create a website that actually converts.

So better website and ads.

Ads that actually convert. Right. And actually we'll track your leads inside of Google Ads. People know like what is the customer acquisition cost?

How do you guys track all your leads, like all these different leads into one, you know your close ratio and stuff. Because that's another thing.

Well, cause like in Google you can, you can have your Google tracking code and inside of Facebook, your Facebook pixel and then it will know who actually hits the page. That is the thank you page after submitting the estimate request form.

Nice.

So you don't, you don't just have like how many clicks. Yeah, you have how many conversions, which is like how, how many people actually submit a lead. So then you're like, okay, Google's telling me I'm 50, $60 cost per conversion, cost per lead. That is someone who submitted an estimate request form. Then I know I have a 50% close ratio. Great. Now we're getting customers like $110, $120 instead of 2000.

That's tough. Yeah.

And these customers that you're getting, they're low priced. They have no brand awareness of you. They're looking at you as a commodity you. Because that's how they joined this whole lead gen thing. I know how these lead gen things work too. They just take City names, they work pool service, they funnel those leads in and then they sell them off.

Yeah.

Yeah.

And so then we become like, we become addicted to the lead gen of like, Angie's List and Yelp and all the rest of it. And we'll never make any profit.

Yeah, yeah, yeah. I mean, with Angie, though, on average, it's probably around $100, right?

Like, it's better than buying them.

Yeah, 100%.

I believe, though, you can get. You can consistently get leads from Angie's, Yelp, and ideally your own organic leads for less than 100 bucks per lead.

See, that'd be awesome. I always hear your videos like that. And that's why I'm like, I just kind of cringe when I'm throwing money at Yelp or something. And it comes back like 200 plus $300 per.

It's still better than buying, I guess.

Yeah, I guess it is in a way, though. Because if I'm giving them a free month or something, or if I'm doing free estimate, which I don't know. I watched your breakdown on the free estimate thing and I was like, dang, I gotta stop doing that.

Yeah. But let's say you give a free estimate, you give a free month. We're looking at a couple hundred bucks there. And then let's just say you have to spend $200, worst case scenario, on a lead. We're still at $400, still a little bit, versus $2,000 to buy the thing.

And now you're in a dispute over, like, the ones you purchased.

Like, you gotta. We really wanna think, like, what does it cost to actually break even on a customer? Just to pay back the customer acquisition cost.

Right. Yeah. And that's another thing, is my profit margin, I think, is a little bit. I don't know. Cause I don't have any really overhead besides like two trucks. So I think it's like, I don't know, I wanna be on track to be set up for the. The future, you know, if I do have to buy a shop and stuff. So that's why I think my margins look good, but maybe they're not as good. Does that make any sense?

Well, a lot of times when you're first getting started, you know, the contractor's license, you might not have the commercial insurance and all these things, your margin gets increased simply because you're just not. You haven't professionalized it yet. Right, Right. Once you start professionalizing it. But that is the difference between going from 300,000 to a million.

Really?

Contractor's license, contractor's license, commercial insurance.

I should get it. Yeah.

Next couple months, getting the website dialed in, having either yourself or someone else can set up these funnels for you in terms of Google and Facebook so you can actually track the customer acquisition cost.

So it's not as simple as just setting up Google Ads.

Well, yeah, it's a matter of spending a Day on YouTube figuring out how to set it up with a pixel, how to set it up with a tracking code so that every single time someone gets to the SM request form and submits the form, it triggers that code. So you can actually track who got to that page.

So you guys pretty much look at each lead source and you track it into it.

Exactly right. Because if I have, if I have.

That takes a lot of time probably.

No it doesn't. It takes, it takes you a day of figuring out on YouTube how to set up your pixel and how to set up your Google tracking code.

No, but it takes a lot of time tracking every single lead.

No, that's what the pixel code does. It literally you'll go to like your, your, your ads manager and it will be like, here's your cost per click, here's your cost per lead or conversion. And then you know the conversion is they have submitted an estimate request form and then you can track what your close ratio did come up with the customer acquisition cost.

Yeah, yeah, you're right. You're right. You're definitely right.

But like that's why like these lead gen companies make so much money.

Yeah.

Is because they just want to give it to you on a silver platter, but they're charging you like a 10x premium.

So should I wait to raise prices till I hit a million?

I would know I would raise prices when a route gets filled.

Really?

Because then that's the next jump. That's the capacity for you. Right. So like for example, like right now, how many more, how many more pools could we take before we fill the two trucks and have to buy another one? Like another 20 or 30.

Yeah, 20. 30. Yeah. Right.

So it's okay when that number is established, we have this decision, a fork in the road. Do we a keep growing and scaling? Because now we figure out leads, we have a great website pumping them out. Do we go get another truck, get another employee and keep growing or do we raise prices, optimize for profit and then lose some customers but get more capacity? Because we've lost 10 or 15 customers.

So I guess it probably does it depend on how much cash you have because it's like, yeah, because if you.

Have a lot of cash, you want to keep going, keep growing.

Okay, okay.

But if you're like, hey, I'm kind of a little out here, I'm not feeling great, then raise prices. You'll immediately become more profitable.

And you say what you say. I forget what you say. I think you just say one month revenue, right?

For what?

Like reserves Bank.

Yeah, money in the bank. Like, I see no problem with your cash reserves whatsoever.

Sometimes we do like a, like a 30 grand month, though. Then it's like, do I want to keep that much, like, or do I just, you know, whatever the average is.

Well, this is the thing. You're young. This is the time to take risks, man.

Yeah, it's okay.

Like, are you gonna get married anytime soon?

I want it. I want it. Do you have, like, I want a house too. That's what I really want.

Okay.

That's why I've been kind of staying at home longer, because I really want to buy a house, but it's not the best time to buy right now.

And so would you buy the house and get a shop space kind of thing on it? Is that what your goal would be?

That's kind of what I'm thinking. Yeah. Either get like, you know, multifamily, so I can have a lot of parking spots maybe, or. Yeah, I mean, it's really probably whatever I can afford.

So then it's like, okay, like, let's build a business, does a bunch of cash flow, you get a couple solid tax returns underneath your belt. So that way, when, when time is right, you know, FHA loan, 5% down, you could easily get a house.

So. And I, I can still get those solid tax returns by just paying myself W2 right through the business.

You could. Or just have really good profit, cash flowing business where you can show like two, three years of solid income.

Okay, nice.

And it's growing. Like, hey, it went from 300,000 to 500,000 to 800,000. Like, and it's profitable every single time. And I'm taking these distributions and here's all the retaining, and here's $250,000 in the bank.

Yeah, that's what I want to. I want to hit 300 by the end of the year. And right now I think we're. I have to make like 10 grand more every month to hit that goal.

Yeah. And so, like, what actions are we taking to hit that right now?

Pretty much just trying to fill up my work.

And then how are we filling up the work?

Pretty, pretty small Actions, Honestly, that's, that's.

The thing I'm looking at. Like what actions are we taking towards? The goal is far more important than the goal itself. I know you're like, well, what's the plan? Well, we kind of established some of the plan. We want to build a million dollar business. We want to have a manager. We wanted them to be able to focus potentially on repairs and installs. Right, right. So that's the goal. We just work backwards to the fact that we need more jobs.

Yeah.

And how do we get the jobs? We can't be leaning on $2,000 per pool thing. Like, what's your churn right now? Do you lose customers occasionally?

Yeah, maybe. Yeah. One everybody. Couple months, maybe. Not often, right? Not often at all. But recently it's before I lose none. Like, at least none for like quality. But since I switched employees, it's like, you know, people make mistakes, so.

Yeah, but let's say, let's say you lose one every. Like what if you lost a 10 every year?

Yeah, probably. Okay, probably. Fair. Yeah.

But if we buy two.

Yeah.

For $2,000 or buy. Buy pools for $2,000 per. We literally are losing money on most of those. We don't retain them for the entire two years.

Wow. Yeah.

Before they actually make us money.

I know. What's the math on paying 12 times?

Horrible.

Like three years or something.

You need them for like three years. And if we're losing 10 per year.

Yeah.

Okay. Yeah. Not doing that again.

I do believe we need to get off of the, like, we need to buy back into like how do we generate the leads? And these guys, the reason they're big is. Cause that's what they're focusing on. On.

I talked to him like, I talked to the owner like a couple times and I've never, I don't know, I kind of felt bad since we're kind of competitors. I didn't really feel good about asking him how he's advertising, but.

Oh, I can tell you people are finding him and he's just, they're just showing up. Like literally request service.

There, there's your, there's your quote form. Let's go guarantee.

You like that? You like that?

That's fine. Yeah. Like this. But I would prefer this be on the homepage. That's where customers are going. But like this get a free quote is better than inquire.

Okay.

Inquire about what they want a free quote. Right. So like try to make it obvious to the customer when they come to the site what they're Looking for is the free quote.

Right.

I would try to even expedite that with instant pricing. Like, there's nothing keeping you, like, I would assume. What's the range of pricing that you have?

It's usually like, well, it could range depending, but on average, it's like 140 to 160 on average.

Okay. So what's your lowest? 110.

Well, here's the thing. We do like bi weekly. We do like some chemical only. I think we have a stop that we just do once a month. So that one's like 40 bucks.

Yeah. Just ranges kind of all over the place.

But you could probably take it into three categories. Like, hey, if you want to do chemical only, here's this. Then like a secondary, like, middle one and then third one. Kind of like what they did on theirs.

For their three pricing.

They have their three price, but they don't. They just. They have like, they have essential, premium, and elite.

So you like that?

I love that.

Okay.

I would go to instant pricing.

Okay.

I would say you put a price on that. $38, $48, $56 just for like the average pool. Yeah.

Okay.

Now I. You adding.

Oh, you do the weekly price, too?

I would do probably whatever's the lowest. Like, if you do weekly, it's probably the lowest price.

Yeah. But then they're like, I want to know how much it is monthly. I don't know. I feel kind of like salesy when I say the weekly price.

But would you prefer weekly? Is it easiest for scheduling and routing and all the rest of it?

Well, no, we bill monthly. I don't know if this is your question or not, but we bill monthly. But I just home, like, say it costs 35 a week instead of 140 or 120 or whatever that is.

Yeah. Just given the weekly price. Like, we do per cut price.

Oh, yeah, right.

So you'd be like per cleaning price.

Yeah.

And so you could just like. The reason I think that'd be a big hit, especially if no one else in your market is doing it, is people are looking for a quote. They don't want to submit a form.

Yeah.

They want to click this and like buy now.

Right.

Schedule my service.

And I go, what if they're a larger pool and I lose? Like, I have to spend extra five minutes in the property.

Yeah.

Who cares? They. They want a price. They do not want to submit five. These forms to five different companies. Get five bids. They want a price. If they can just go here and click schedule now.

Yeah.

Then fill out their information and then the next thing that goes to them is a credit card request form from the software. That's what.

I love that idea too, but my software doesn't do that. But like the credit card payment up front at least.

Yeah.

Doesn't do that.

Did you have to do it manually?

Well, they can put it in, but I have to send them an invoice. So maybe I just send them an invoice.

Oh, I see. I guess like to put a card on file, you're saying?

Yeah, yeah. Because they can do it through the email. But yeah. Here's what's cool about this one. It tells you like on average like what every pool is.

Yeah.

See like all the way at the bottom.

Yeah.

It's like.

So our lowest ones are probably monthly people and they're like 20, 30 bucks.

Yeah.

Okay.

Profit.

Profit. Got it.

Kind of. It's pretty correct at least. But I don't know if this is the best thing to track it though.

Yeah, but, but really it's like a matter of like I. If I asked you like, hey, what is the average going rate for most of your pools?

Yeah. Was it? Yeah. 140 to 160.

Right. So then it's just a matter. Okay, let's do a, a $30 package, a $40 package and a $50 package per week.

I like that. I've been meaning to do that.

That's 29, 39 and $49 per visit. That would be a great way to just like immediately have people come in. They click schedule. Now instead of request a quote or inquire or anything like that.

How would you do the schedule now?

Part, they click on it, they fill out their information and then that form is going to come to you saying they want this specific service and you put them on the schedule.

Okay. So it's not actually like they pick their day because I've heard of people doing that through like I forget the app name, but where they can kind of look at your schedule and they can pick the day.

I don't want them to pick their day. You're gonna tell them the day. I know. So it's gonna come into you. It's gonna be okay, great. Based upon my route and their address, here's the day that I'm gonna put them on. Then you send them an email. Thanks so much for signing up with co crew pools. Here's. Here we go. Co Crew pools. Let's go. Like, here's the date of service.

I need to hear this.

So this is good, right?

Yeah, the name I've always been bad about. But yeah, no, you're right.

I want people accepting a quote before I even tell them the date of service.

Yeah.

I don't want them dictating what day of service. Like, I am a route based company. I need to be able to optimize it myself. So I want them to check out based upon the price and the service that they're getting. And then I'm gonna send them an email telling them what day of the week they'll be there and we give plus or negative. One day.

Plus or negative. One day is a pretty, pretty good idea.

No one balks at that.

That's crazy. I couldn't even imagine.

Because see, as soon as you give them the option, like what day of the week? Now they're. Oh man, well, what day of the week do I want it? They don't care. They just want their pool cleaned.

I usually tell them what day. Yeah, but yeah, still, I mean, plus.

Or minus, it makes your scheduling so much easier because like if there's rain, if someone calls out, you can move things around way more flexible.

Yeah, no, that's true. That is very true.

But like whoever, like, do you have someone that could do the website for you?

I mean, the guy who I, they, they'll edit it for free for me.

Okay, cool.

At least this guy. Cool. So would you do it so they can actually check out on the website? Like putting their credit card on the website?

Ideally, yeah.

But it might be.

That's a little more difficult because that's gonna have to integrate with this.

Okay.

So I would probably just say, like, get them to fill out the form, then you can handle on the back end either sending them, hey, put your card on file, or like after the first invoice they can put the card on file. That's fine. I just want this to be as simple as, like grease the wheels of them solving the problem. And they did not come to you wanting a quote. They came to you because they wanted their pool fix.

Right, Right. Right.

So get them to that as fast as possible. Like people that actually have money, they don't want the run around of getting five quotes.

Yeah.

They want their problem solved tomorrow.

Right. I thought it took time to build brand, you know, to get organic.

It does.

So it's gonna be a while, but yeah.

I just know that even if we drive paid leads right now, like paid traffic, we're not going to be spending $2,000. Yeah, like anything above $300, I'd be losing my mind over that's.

My Angie is maxed out or not maxed out, but I have a 2000 limit on Angie and they never hit it.

Yeah.

So.

So now we go after people searching San Diego pool cleaning service, and we crush that Google. And then we track it and actually know, like, how, like, I want to be when in a year I come back to you and you're like, yeah, I know the cost per lead from Google. I know the cost per lead from Facebook. I also then know my close ratio, which then gives me how much I have to spend on these channels to get one paying customer. And I can guarantee you it's less than $2,000.

I agree. I love it.

And then that will bring down the amount of time we have to spend on a property before we even break even and make a single dollar of profit.

Right.

I love it, I love it, I love it.

That's basically it. I know it's simple, but, like, it is. Literally those few things will completely change the business.

Yeah.

And then down the road you can address the problem. Like, too many leads. Okay.

Do I raise prices, like, plateau? You know, like, right now I feel like I'm plateau a little bit.

You're comfortable.

Yeah. And so what's the only thing to get past that? Like, just. Just chasing the goal, I guess.

Well, two things can happen. One, something crazy in life can happen and you have more pain.

Right. Which I. Which I think is what happens to me. I, like, I get too comfortable and then I kind of screw it up.

Yeah.

And then, because, like, two years ago I had a rough path, and then two years before that I had a really rough path, and then. Yeah, it's always like, I mess up big and I'm like, all right, I.

Gotta really mess up in the business or personally?

Both. Yeah.

So, like, relationships kind of get messed up.

Oh, yeah. Drugs, all kinds of stuff.

Yeah. Well, good for you, dude. Like, you turn stuff around.

Yeah. I mean, I was young, but.

Yeah, but, yeah, but like, that's what I'm saying is, like, be confident in that. Like, some of it just comes back to confidence. Right. Confidence you can build a million dollar business. Confidence you don't need to go to school to get a degree. Confidence that, like, the business is gonna do well. Confidence that you're not gonna have money problems. And like, the things that happened in the past, like, that was hard for me to get over.

Dude.

When I was your age, I was the guy who's supposed to go to medical school and become a doctor when I was super young.

Yeah.

And so at 21, I had people emailing me saying, what are you doing wasting your life here? It's a throwaway of talent. You should be doing X, Y and.

Z. I know you got. Probably got. Yeah. That's rough. Yeah.

So, like, part of it is conviction and passion for, like, what does. Like, that's why I asked you, like, what is the end goal at the million dollar thing? You've got to actually know that's your goal.

Yeah. I mean, why?

It's your.

I have reasons for it, but it's like, you know, when you're comfortable. Yeah. It's like it takes away the reason, you know?

Yeah.

A little bit. A little bit.

Like, I would make it. I would. I would make the goal like it. Make it so successful. There is no plan B. And that the. The path for success is extremely clear. And if someone's like, you should go to school. You won't even think about it. You'd be like, go. Go fly a kite.

Yeah.

Like, I got this million dollar business I built.

Yeah. Yeah. Everyone my age is about to get out of school, I think.

Yeah. And they're all starting at zero.

Maybe. We'll see.

No, they're all starting at zero, maybe. And they're in debt.

They might have parents, money, who knows? Especially people around here.

You got a vehicle, they got a piece of paper.

Yeah.

That'S all right. Yeah, it's all good.

Different paths. Different paths.

Yeah. No, I get it.